Cardholders that purchase flights over US$100 through the American Express Travel website (AmexTravel) will have the option to pay with AmEx’s ‘Plan It’ feature – paying for their upcoming travels in instalments via a fixed monthly fee, known as a buy now, pay later (BNPL) option.
The latest move from AmEx comes following its research, which cited that over one-third of Americans are looking for deals or flexible payment options to pay for their next trip, including BNPL, and that 62 per cent of millennials are interested in a BNPL offering that comes with their credit card.
“Plan It has become a popular tool for many of our card members – particularly among millennials and Gen Z – who want to easily manage their purchases in a simple and transparent way, from a brand they know and trust. With travel bookings on American Express Travel up 50 per cent sequentially in the first quarter, and vaccinations accelerating, it’s a great time to make this feature available for booking travel on AmexTravel.com,” said Shikha Narula, Vice-President of US Consumer Lending.
According to a press release from the company, Plan It will also be added to the checkout experience for prepaid hotel bookings on AmexTravel.com later this year.
The rise of annual trip travel insurance policies?
BNPL isn’t new to consumer purchasing, it’s been increasingly on the up with services such as Klarna and Clearpay allowing shoppers to purchase goods via credit and split the cost across several months. And it ties in with more modern consumer trends such as subscription services, as it allows consumers to better manage costs and retain and revise their use of services that meet their needs. Back in 2019, ITIJ assessed how the growth of subscription insurance simplified the purchasing process for insurance customers, and helped increase their engagement with insurance as a product.
The emergence of AmEx’s new BNPL offering in the travel booking sphere could mark a milestone moment for change in consumer travel habits – especially at a time when confidence in travel is at an all time low and when flexibility in booking is crucial to consumers. The financial stress that accompanies travel may no longer need to be so prominent, and consumers will be able to enjoy travelling on a more frequent basis, knowing that they can split the cost across a time frame that better suits them. This may also free up some of their cash to consider higher levels of travel insurance cover – perhaps for annual policies as opposed to single-trip. Just a thought.